The Conference Board announced today that the leading index for Spain decreased 0.2 percent and the coincident index increased 0.1 percent in March.

• The leading index declined slightly in March after rising strongly in February. The weakness in the leading index in March is mainly due to a large decline in the construction component of industrial production plus small declines in the financial sector (stock prices, bond yield, and money supply).
• Despite recent weakness, the leading index has been on a rising trend since the beginning of 2002. Without the negative contributions from estimates of the construction and capital equipment components of industrial production (see box above), the leading index would have registered stronger gains in recent months.
• The coincident index increased moderately in March. The strength among the components of the coincident index continues to be widespread, as shown by the six-month diffusion index which has remained at 100 percent for the last ten months.

LEADING INDICATORS. Only two of the seven components that make up the leading index increased in March. The positive contributors are the order books survey and job placings. Five of the seven components decreased in March. The negative contributors-in order from the largest negative contributor to the smallest-are the construction component of industrial production*, the Spanish contribution to Euro M2, the Spanish equity price index, the inverted long-term government bond yield, and the capital equipment component of industrial production*.

With the decrease of 0.2 percent in March, the leading index now stands at 155.4 (1990=100). Based on revised data, this index decreased 1.0 percent in February and decreased 0.7 percent in January. During the six-month span through March, the index increased 3.8 percent, and two of the seven components advanced (diffusion index, six-month span equals 28.6 percent).

*See notes under data availability.

The next release is scheduled for June 19, 2003 at 9:00 A.M. (ET)
In Spain -June 19, 2003 at 3:00 P.M. (CET)

COINCIDENT INDICATORS. Three of the four components that make up the coincident index increased in March. The positive contributors -in order from the largest positive contributor to the smallest-include final household consumption*, real imports*, and the retail sales survey. Industrial production excluding construction* declined in March.

With the increase of 0.1 percent in March, the coincident index now stands at 137.6 (1990=100). Based on revised data, this index increased 0.4 percent in February and increased 0.3 percent in January. During the six-month span through March, the index increased 1.6 percent, and all four components advanced (diffusion index, six-month span equals 100.0 percent).

DATA AVAILABILITY. The data series used to compute the two composite indexes reported in the tables in this release are those available "as of" 10 A.M. (ET) May 14, 2003. Some series are estimated as noted below.

NOTES: Series in the coincident index based on The Conference Board estimates include final household consumption, industrial production excluding construction, and real imports. Series in the leading index based on The Conference Board estimates are construction component of industrial production and capital equipment component of industrial production.

Professional Contacts at The Conference Board:
Ataman Ozyildirim: 1-212-339-0399

Media Contacts:
Frank Tortorici: 1-212-339-0231
Randy Poe: 1-212-339-0234

Website: http://www.globalindicators.org

THE CYCLICAL INDICATOR APPROACH. The composite indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. The leading and coincident indexes are essentially composite averages of between four and nine individual leading or coincident indicators. (See page 3 for details.) They are constructed to summarize and reveal common turning point patterns in economic data in a clearer and more convincing manner than any individual component-primarily because they smooth out some of the volatility of individual components.

Historically, the cyclical turning points in the leading index have occurred before those in aggregate economic activity, while the cyclical turning points in the coincident index have occurred at about the same time as those in aggregate economic activity.

Further explanations of the cyclical indicator approach and the composite index methodology appear in The Conference Board's Business Cycle Indicators report and Web site:www.globalindicators.org.

Spain Composite Indexes: Components and Standardization Factors

	Leading Index	Factor
1.	Construction Component of Industrial Production	.1946
2.	Capital Equipment Component of Industrial Production	.0381
3.	Contribution to Euro M2	.3814
4.	Stock Price Index	.0387
5.	Long term Government Bond Yield	.0660
6.	Order Books Survey	.1842
7.	Job Placings	.1004
	Coincident Index
1.	Final Household Consumption	.6215
2.	Industrial Production, Excluding Construction	.2477
3.	Retail Sales Survey	.0611
4.	Real Imports	.0697

Notes: The component factors are inversely related to the standard deviation of the month-to-month changes in each component. They are used to equalize the volatility of the contribution from each component and are "normalized" to sum to 1. (Under normal circumstances, updates to the leading and coincident indexes only incorporate revisions to data over the past six months.)

The factors above were calculated using 1984-2000 as the sample period for measuring volatility for the leading index and the coincident index. There are additional sample periods as the result of different starting dates for the component data. When one or more components is missing, the other factors are adjusted proportionately to ensure that the total continues to sum to 1. For additional information on the standardization factors and the index methodology visit our Web site: www.globalindicators.org.

To address the problem of lags in available data, those leading and coincident indicators that are not available at the time of publication are estimated using statistical imputation. An autoregressive model is used to estimate each component. The resulting indexes are constructed using real and estimated data, and will be revised as the data unavailable at the time of publication become available. Such revisions are part of the monthly data revisions, now a regular part of the U.S. Business Cycle Indicators program. The main advantage of this procedure is to utilize in the leading index the data, such as stock prices, that are available sooner than other data on "real" aspects of the economy, such as new orders and changes in inventory. Empirical research by The Conference Board suggests there are real gains in adopting this procedure to make all the indicator series as up-to-date as possible.

NOTICES

The 2002 schedule for the Spain "Leading Economic Indicators" news release is:

April 2003 Data............... Thursday June 19, 2003
May 2003 Data............... Thursday July 17, 2003

All releases are at 9:00 A.M (ET), 3:00 P.M. (CET)

ABOUT THE CONFERENCE BOARD. Founded in 1916, The Conference Board is the premier business membership and research network. The Conference Board has become a global leader in helping executives build strong professional relationships, expand their business knowledge and find solutions to a wide range of business challenges. The Board's Economics Program, under the direction of Chief Economist Gail Fosler, is a recognized source of forecasts, economic analysis and objective indicators such as the Leading Economic Indicators and the Consumer Confidence Index.

This role is part of a long tradition of research and education that stretches back to the compilation of the first continuous measure of the cost of living in the United States in 1919. In 1995, The Conference Board assumed responsibility for computing the composite indexes from the U.S. Department of Commerce. The Conference Board now produces business cycle indexes for the U.S., Australia, France, Germany, Korea, Japan, Mexico, Spain and the U.K. To subscribe to any of these indexes, please visit www.globalindicators.org, contact the Global Indicators Research Institute at 212-339-0330, or email indicators@conference-board.org.

AVAILABLE FROM THE CONFERENCE BOARD

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Business Cycle Indicators for Australia, France, Germany, Japan, Korea, Mexico, Spain and the U.K. are available at $500 per country per year (1 user). Discounts are available to Associates of The Conference Board and accredited academic institutions.